Record current account surplus of $4.9 billion in October

Nov 28, 2008

Source : Bank of Korea

Korea’s three-month-long current account deficit turned into a surplus of US$4.91 billion in October, an all-time high since 1980, when records began to be kept.

According to a tentative report on the international balance of payments in October, released by the Bank of Korea on Nov. 27, Korea’s current account deficit of $1.35 billion in September turned into a surplus of $4.91 billion in October.

The current account surplus was the result of goods and current transfer accounts swinging into a big surplus, the income account also recording a surplus, and the service account deficit dwindling, the central bank said.

The current account had posted a deficit for six months running until May this year, beginning with a deficit of $810 million in December last year. But it posted a surplus of $1.82 billion in June. It then again turned into a deficit for three straight months until September, beginning with a July deficit of $2.53 billion. This year’s accumulated current account deficit from January to October was $9.01 billion.

The September goods account deficit of $890 million turned into a surplus of $2.79 billion in October, due to a sharp month-on-month drop in imports in the wake of a large fall in the prices of raw materials, including oil, amid a remarkably slow increase in exports and imports.

In October, exports recorded $37.37 billion, up 8.5 percent year on year, thanks to a rapid increase in exports of ships, while imports recorded $36.16 billion, up 10.4 percent year on year.

The service account deficit considerably diminished from $1.24 billion in September to $50 million in October, given that the tourism account had swung into a surplus and the transport account surplus had increased.

The income account surplus increased from $790 million in September to $1.41 billion in October, thanks to a drastic increase in the interest account surplus. The September current transfers account deficit of $20 million turned into a surplus of $770 million thanks to a sharp increase in incoming remittances.